Farmers seek income security law in pre-budget consultation

A file photo of a farmers’ protest in Delhi. Agriculture sector output decelerated to 1.7% in the September quarter from 2.3% in the June quarter due to unfavourable kharif output. Photo: HT

New Delhi: Farmers on Tuesday urged finance minister Arun Jaitley to statutorily ensure income security for them and simultaneously take steps to reduce input costs and thereby make farming profitable.

The suggestions from the Consortium of Indian Farmers Associations (CIFA) and agriculture economists was made at the first of the pre-budget consultation.

“The median agriculture income is about Rs1,600 per month. No family can sustain with this even in the remotest part of the country. Hence the farming community of India demands an Income Security Act for farmers, tenant farmers and farm labourers,” Bojja Dasaratha Rami Reddy, secretary general of CIFA told reporters outside the finance ministry after the meeting.

Not only is this putting the spotlight on rural distress, a key issue agitating farmers across the country in general and also a central focus in the ongoing Gujarat election campaign, it will revive the debate on universal basic income—a policy idea mooted by chief economic adviser Arvind Subramanian.

Although nearly half of the 1.3 billion population depend on farming, agriculture and the rural economy together account for less than a fifth of national income, making price volatility of farm produce and uncertainty of farmer income a major policy challenge for the government.

Agriculture sector output decelerated to 1.7% in September quarter from 2.3% in the June quarter due to unfavourable kharif output, according to a 30 November statement from the Central Statistics Office.

The rural distress, arising due to a combination of the collapse of global commodity prices after 2009 and three years of drought, has squeezed demand impacting the bottomline of corporate India—especially those operating in consumer goods.

Jaitley had indicated at the 15th Hindustan Times Leadership Summit 2017 on 30 November that the big focus of next year’s Union budget will be spending on infrastructure and the rural sector, Mint had reported.

“There is a big difference between the price that a farmer gets and the price that the final consumer pays. Unless you protect the farm sector with an income security law, the nation’s food security cannot not be ensured,” said Reddy. Such a law could make a basic minimum income a legal entitlement.

A long-term solution to address volatility in prices of agriculture produce is to have a much better market and price discovery mechanism, said N.R. Bhanumurthy, professor at the National Institute of Public Finance and Policy, a think tank.

Agriculture economist Ashok Gulati, who attended the meeting, said that the government has been requested to take steps to prevent prices of commodities falling below the minimum support price (MSP) and to link it with the customs tariff so that imports do not become cheaper than domestic produce.

CIFA sought income tax breaks for producer companies—entities doing activities relatable to farming, removal of all restrictions on stocking farm produce under Essential Commodities Act and no goods and service tax (GST) on items used in agriculture such as fertilizers, pesticides, tractors and harvesting and irrigation equipment.

Jaitley said that to achieve the goal of doubling farmer income by 2022, there is need for better storage and marketing facilities for farm produce, an official statement from the ministry said.

Jaitley later in the day met trade union groups and assured them that the government was fully committed to safeguard the interests of the workers, especially those in the micro, small and medium, enterprises and the unorganized sector. The minister urged businesses to comply with the minimum wages prescribed by law, said a second statement from the ministry. Nine trade unions gave a joint wish list to the minister, which included an appeal to step up budgetary allocations for health and education.